ODU experts forecast slow growth for Hampton Roads economy

According to Old Dominion University’s economic experts, the Hampton Roads economy is improving… albeit very, very slowly.Overall, Agarwal reported that the economy is expected to grow by only 1.59 percent in 2016. This is a slight improvement over the 1.14 percent growth last year. While the 2016 number is higher, it still ranks far behind the region’s historical annual average of 3.1 percent and even farther behind the U.S. economy’s growth rate.

Defense dependency

As has become a mantra in the Hampton Roads business community, the region must become less reliant on DoD spending to thrive. The region’s current dependence stands at 39.2 percent (lower than a 44.4 percent peak in 2011), but none of that matters if the private sector cannot pick up the slack.

Employment deficit

Civilian employment in the region is expected to increase by about 7,100 jobs during 2016. Agarwal said that employment growth is likely to be concentrated in firms providing professional and business services, construction, leisure and hospitality, and health care services.The recession and its aftermath took a toll on local jobs. Between 2007 and 2010, the hobbled economy claimed an estimated 40,000 civilian jobs in Hampton Roads. According to the report, the region has been able to recover only 25,000 of those jobs since 2010. Even with the expected gain in 2016, Hampton Roads still has a lot of ground to make up in terms of jobs. Agarwal predicts that the region’s unemployment rate will continue its five-year decline, falling from 5.07 percent in 2015 to 4.30 percent in 2016.

The Reinvent Hampton Roads organization is preparing the region to apply for potential new state incentives intended to help localities collaborate on economic development projects.

Reinvent Hampton Roads President and CEO Jim Spore, former Virginia Beach city manager, said he is meeting with the economic development departments in the region to help identify potential projects that could involve more than one locality so the region could be ready to apply for incentives that the business coalition-led GO Virginia initiative is asking state lawmakers to pass this General Assembly session.

"We're not here to interrupt the work that all the organizations in this region are doing," Spore said, adding Reinvent wants to foster collaboration and better communication in the region.

Reinvent Hampton Roads is an outgrowth of the Hampton Roads Community Foundation's effort to establish a framework to diversify the economy away from defense spending. The idea is to turn the tide on the region's lackluster job growth since the recession. Reinvent became a separate nonprofit earlier this year and Spore took the helm Jan. 4